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Is bigger better? An analysis of economies of scale and market power in police departments

Is bigger better? An analysis of economies of scale and market power in police departments The purpose of this paper is to investigate whether the nature of policing services allows for economies of scale to be realized. It is also a replication of Southwick (2005).Design/methodology/approachThis study replicates the methodology used by Southwick (2005) to estimate police production and demand in order to determine whether there are economies of scale among police departments in a western state. Southwick’s (2005) method is unique in that it incorporates measures of market power to predict police efficiency. The present study is unique in that it involves data from a low-density, low-population western state.FindingsSouthwick’s results for New York State are markedly different from the results found for Idaho, thus questioning the external validity of Southwick’s model as applied to a relatively low-population state. The findings also indicate that, controlling for relevant variables, crime in Idaho is highly correlated with population, suggesting that police departments in low density/population states would not achieve efficiency gains through consolidation.Research limitations/implicationsThe implications of this study include validating police performance measures and evaluating applicability of market power to police departments.Practical implicationsNo evidence was found to support the contention that consolidation of police departments results in efficiency gains.Originality/valueThis is the first study of economies of scale in policing to use data from a low-density, low-population western state. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Policing: An International Journal of Police Strategies & Management Emerald Publishing

Is bigger better? An analysis of economies of scale and market power in police departments

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1363-951X
DOI
10.1108/pijpsm-08-2016-0135
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to investigate whether the nature of policing services allows for economies of scale to be realized. It is also a replication of Southwick (2005).Design/methodology/approachThis study replicates the methodology used by Southwick (2005) to estimate police production and demand in order to determine whether there are economies of scale among police departments in a western state. Southwick’s (2005) method is unique in that it incorporates measures of market power to predict police efficiency. The present study is unique in that it involves data from a low-density, low-population western state.FindingsSouthwick’s results for New York State are markedly different from the results found for Idaho, thus questioning the external validity of Southwick’s model as applied to a relatively low-population state. The findings also indicate that, controlling for relevant variables, crime in Idaho is highly correlated with population, suggesting that police departments in low density/population states would not achieve efficiency gains through consolidation.Research limitations/implicationsThe implications of this study include validating police performance measures and evaluating applicability of market power to police departments.Practical implicationsNo evidence was found to support the contention that consolidation of police departments results in efficiency gains.Originality/valueThis is the first study of economies of scale in policing to use data from a low-density, low-population western state.

Journal

Policing: An International Journal of Police Strategies & ManagementEmerald Publishing

Published: Jul 26, 2018

Keywords: Rural policing; Market power; Consolidation; Economies of scale

References